This loan will allow Khan Bank to increase lending volumes for rural agricultural enterprises, as well as enhance climate risk management and promote "green" investments among small local companies. It is planned that at least 15% of the allocated funds will be directed towards supporting projects that contribute to environmental sustainability and climate change adaptation for local farmers.
This is the first loan provided by the EBRD in Mongolia and Central Asia specifically targeted at agribusiness. It aims to expand the opportunities for climate-adapted financing and improve access to finance for under-resourced rural enterprises. Additionally, the project supports Mongolia's national sustainable financing strategy.
The agricultural sector accounts for more than 7% of Mongolia's gross domestic product and provides jobs for a significant portion of the rural population. However, this sector faces numerous challenges, including extreme climatic conditions, pasture degradation, outdated infrastructure, and inadequate logistics. New financial resources and modern financial instruments will help herders and small processors in remote regions enhance their resilience.
In addition to this project, technical assistance will be provided under the EBRD's "Consulting for Small Business" program, funded by the European Union.
Since its inception, the EBRD has invested approximately 2.55 billion euros in Mongolia across 160 projects, with about 90% of all investments directed towards the private sector.
